ASH.L Regulatory News (ASH)

25 Jun 2007 07:01

Ashley House PLC25 June 2007 Ashley House plc 2007 Preliminary Results Ashley House plc ("Ashley House" or the "Company") the Primary Careinfrastructure specialist is pleased to announce today its maiden preliminaryresults since being admitted to AIM for the year ended 30 April 2007. Highlights include: • Turnover up 11% to £25.6m due to organic growth (2006: £23.1m) • Profit before tax and exceptional items up 84% to £4.1m (2006: £2.2m) • Earnings per share before exceptional items 11.4p up 42% (2006:8.0p) • Total dividend up 25% to 5p (2006: 4p) • Successful IPO on AIM raising £5m of new money • Net assets increased 245% to £11m year end cash balance stands at £6.1m • Strategic alliance with Babcock & Brown completed accessing a large pipeline of NHS LIFT projects • Successful completion of 10 projects in the year • Current trading remains encouraging with a strong pipeline of forward business and the Babcock & Brown relationship working well with several projects under way Commenting on the results Chairman Sir William Wells said: "This has been a very exciting year for Ashley House which has seen the Companymake significant progress, especially following the successful flotation on theAIM market in January this year. During the period we also agreed a Strategic Alliance with Babcock & Brownproviding the business with another substantial pipeline of work in the NHS LIFTmarket as well as a potential partner for our larger schemes incorporatingHealth Parks and Community Hospitals. Events in the past year therefore give us every confidence over the futureprospects of the business." Enquiries:Ashley House plc Tel: 01753 891189Jonathan Holmes, Chief Executive Bruce Walker, Finance Director Citigate Dewe Rogerson Tel: 020 7638 9571Sarah Gestetner / Ged Brumby Numis Securities (Nominated Adviser and broker to Ashley House) Tel: 020 7260 1000David Poutney / Michael Meade / Oliver Cardigan Chairman's Statement Results I am delighted to have joined Ashley House in April 2007 and to be able toannounce an excellent set of results for the year ended 30 April 2007. Turnoverhas grown by 11% to £25.6m (2006: £23.1m), whilst Operating Profit (pre-tax andexcluding exceptional items) was up 84% to £4.1m (2006: £2.2m). Net profit (posttax excluding exceptional items) was £2.8m up 56% from £1.8m in 2006. Earningsper share (excluding exceptional items) reached 11.4p up from 8.0p in 2006. Netprofit (post tax and exceptional items) was down 24% to £1.3m (2006: £1.8m) withearnings per share at 5.5p. The exceptional items amounted to£1.4m and were the expensed element of thecosts of joining AIM of £0.4m and a one-off non-cash notional charge of £1.1mrelating to the issue of the warrant which was part of the Strategic Alliancewith Babcock & Brown offset by a gain of £0.1m on disposal of the head officebuilding. The tax charge this year was higher as there are no more tax lossesavailable and the exceptional items have been treated as disallowable forprudence. As a result the Board recommends a final dividend of 3p per share which bringsthe total dividend for the year to 5p per share, a 25% increase on the 4p paidfor 2006. The dividend will be paid on 24 August 2007 to those on the shareregister as at 3 August 2007. The balance sheet now shows net assets of £11m (2006:£4.5m) with cash of £6.1mand no debt. A year of substantial progress Together with producing an excellent set of financial results, this year ended30 April 2007 has seen Ashley House progress materially. The Strategic Alliancewith Babcock & Brown provides the business another substantial pipeline of workin the NHS LIFT market as well as a potential partner in our larger schemesincorporating Health Parks and Community Hospitals. The admission to AIM and the oversubscribed £5m fundraising in January 2007 wasanother landmark for the Company and marked the beginning of a new chapter. Theplatform of a sound financial base now allows the business to look forward tothe many opportunities emerging as the NHS seeks greater private sectorinvolvement both in the provision of Primary Care Infrastructure and importantlythrough our growing Clinical Services division. Looking Forward With a sound core business and new related business activities coming on stream,Ashley House is well positioned to continue to deliver sustained growth inearnings and dividends. This is an exciting time to become involved with AshleyHouse as the business grows further income streams around the core of PrimaryCare Infrastructure. I would like to welcome new shareholders who joined the share register at theAIM Admission and subsequently to Ashley House. The CEO's report paysappropriate tribute to my predecessor David Burton, but it is a great credit tohim that I am following him into a business which is in such good health and hasthe strong potential to continue its impressive growth., Sir William Wells Chairman Chief Executive Officer's Statement Business Review Together with taking major corporate and financial steps forward as described inthe Chairman's statement, Ashley House has made strong operating progress duringthe past year. I shall set out below the achievements and outlook for theCompany's five activities. Traditional Primary Care Infrastructure The design and project management of Primary Care Infrastructure constructionremains our core business and has contributed the lion's share of the turnoverand profits for the year. We have had a very positive year as ten projects werecompleted in Birmingham, Bolsover, Brighton, Colchester, Danby, Lowestoft,Newcastle-upon-Tyne, Scarborough, Shipton-under-Wychwood and Wokingham. The scheme at Byker in Newcastle is important to highlight as it delivered thevision of an integrated multi-use Primary Care centre likely to be at theforefront of the Government's efforts to change and improve healthcare delivery.At 4,600sqm it incorporates two GP practices, a dentist and dental trainingunit, an Urgent Care Centre that could provide 24 hour walk-in care, a ResourceCentre, Physiotherapy, Pain Management, Mental Health Services, and a privatelyoperated Pharmacy and Optician. Part owned by our associated property investmentcompany AH Medical Properties plc and part PCT owned, Newcastle has throughoutbeen a successful collaboration working with the PCT focusing on local healthneeds and the provision of a long term sustainable solution . The current pipeline for the year to April 2008 remains strong and we havenumerous new schemes on site and due on site in the coming months. NHS LIFT In December 2006, we announced a Strategic Alliance with Babcock & Brown whichrepresented an important step in Ashley House participating in the NHS LIFTprogramme. According to the terms of the Alliance, Ashley House's in-housedesign and construction project management skills can be provided to the LIFTCompanies where Babcock & Brown are the private sector partners. Workingtogether we can deliver more schemes with greater efficiency thereby achievingbest value for the NHS and its partners. We have already achieved stage one approval on four schemes, with progress beingmade towards approval for a further eight schemes whilst we are also in theearly stages of working on an additional nine schemes. The relationship withBabcock & Brown is working well and there is clearly scope for NHS LIFT work tobecome a major part of Ashley House's business. Asset Management Ashley House has a long term contract as asset manager for the portfolio ofproperties owned by AH Medical Properties plc ("AHMP"). The portfolio has grownsubstantially to be approx. £80m of completed income producing assets, doublingin size from £41m as at April 06. This growth has come from schemes completed inthe year by Ashley House along with the acquisition of a portfolio of schemespreviously completed by us. Including those properties now under construction, the portfolio will soon havea gross value of approx. £100m - and not only has the portfolio grown butimportantly, the net asset value per share has also grown by some 50%. With itsrecent successful equity capital raising of £17m, AHMP is well placed tocontinue its growth, with the support of new blue-chip institutionalshareholders such as Schroders Exempt Property Unit Trust who have taken a 29.6%stake. Ashley House also invested £1.85m in AHMP shares giving us a 6.8% stakefollowing the capital raising. The exclusive arrangement between Ashley House and AHMP means that the portfolioshould grow as AHMP is the purchaser of choice for Ashley House's future PrimaryCare project pipeline, which should produce some £25-30m of new assets annually.The asset management fee earned by Ashley House is linked to the gross value ofthe assets with an out-performance fee linked to the return for the AHMPshareholders. We can thus expect substantial and growing Asset Managementrevenues in the years ahead. Health Parks Our first Health Park in Scarborough is on track to achieve planning permissionsoon. The vendors, Scarborough Rugby Club have gained planning consent for theirnew ground, which satisfies a key condition of our contract to acquire the site.Our scheme will incorporate a Primary Care centre, a private hospital, a nursingand care home, and some retirement housing. Whilst smaller than some sites beingconsidered, this Health Park does encapsulate the concept of co-locating anumber of health related activities on one site. We are reviewing a number of other opportunities and are in advancednegotiations on a second, larger site in the South East. We shall make theappropriate announcements as soon as we have secured a new site and gainingplanning consent for the Scarborough site. It is our intention to bring inpartners to co-own these sites which will be capital intensive and are long termin nature. Ashey House will provide the design and construction projectmanagement services to these projects as well as taking an equity interest. Clinical Services Ashley House has a hard won reputation for working with GPs and PCTs to provideinfrastructure solutions. Accordingly, as the remit for GPs to provide anincreasingly wider range of devolved services gathers pace, Ashley HouseClinical Services is positioning itself as the natural commercial partner forgroups of GPs wishing to participate in the new opportunities. On this basis the GPs provide the clinical know how and credibility whilstAshley House provides the management systems, finance, administration andinfrastructure services. We have numerous initiatives under way and we haverecruited an excellent team with considerable experience of running healthcareservices in both the public and private sectors. Key Performance Unsurprisingly after such a strong year, the financial key performance targetshave been met with growth in normalised earnings per share (after excluding theone-off transaction costs) and the strengthened balance sheet. The key corporatetargets have also been exceeded as a significant position in the NHS LIFT markethas been secured whilst the de-stapled Ashley House shares were admitted to AIMand the accompanying fund-raising was oversubscribed. The staff resource hasbeen expanded to match the increased workload and retention of key staff hasbeen good. We are very pleased that Investors In People accreditation has beenrecommended for approval. Current Trading The new financial year has begun well with a number of schemes moving on site,most notably in Brighton where having worked closely with the planners and thePCT, our latest scheme incorporates many carbon footprint reducing features,without making the costs of delivering the scheme uneconomic. The Strategic Alliance with Babcock & Brown is working well as described aboveand we have achieved stage one approval on 4 schemes with many others now beingworked on by our design team. These schemes will start to make a financialimpact in the second half of the new financial year and we look forward toexpanding our work with Babcock and Brown and their partners. Board and future We would like to thank all our people for their hard work and efforts in thesuccess we have achieved, particularly over the past 12 months. We would alsolike to pay tribute to David Burton who leaves us as Chairman in a far strongerposition than when he stepped in some years ago and we thank him for hiscontribution. We are delighted that we have been able to attract such a highcalibre new Chairman in Sir William Wells whose combination of property and NHSexperience are ideally suited for the next phase of Ashley House's growth. J Holmes Chief Executive CONSOLIDATED PROFIT & LOSS ACCOUNT 2007 2007 2007 2006 FOR THE YEAR ENDED 30 APRIL 2007 Before Exceptional Total Restated*) exceptional £000 £000 £000 £000Turnover 25,644 25,644 23,126Cost of sales (18,307) (18,307) (17,995) Gross profit 7,337 7,337 5,131Recurring administrative expenses (3,392) (3,392) (2,887)Non recurring transaction costs - (1,551) (1,551) -Operating expenses (3,392) (1,551) (4,943) (2,887) Operating profit 3,945 (1,551) 2,394 2,244Profit on sale of fixed asset 137 137 -Net interest 4 127 - 127 (30) Profit on ordinary activities before 4,072 (1,414) 2,658 2,214taxationTax on profit on ordinary activities 5 (1,321) - (1,321) (454) Profit for the financial year 17 2,751 (1,414) 1,337 1,760 Basic earnings per share 7 5.54p 8.04pDiluted earnings per share 7 4.78p 7.31p * restated due to adoption of FRS 20 All of the activities of the group are classed as continuing CONSOLIDATED BALANCE SHEET AS AT 30 APRIL 2007 2007 2006 £000 £000 (Restated*)Fixed assetsIntangible assets 203 270Tangible assets 200 1,427Investments 1,850 - 2,253 1,697Current assetsStocks - 15Debtors 7,392 6,753Cash at bank and in hand 6,073 1,502 13,465 8,270Creditors: amounts falling due within one year (4,682) (5,405) Net current assets 8,783 2,865 Total assets less current liabilities 11,036 4,562 Creditors: amounts falling due after more than one year - (50)Provision for liabilities - (15)Net assets 11,036 4,497 Capital and reservesCalled up share capital 275 224Share premium account 8,040 2,771Revaluation reserve - 187Share based payments reserve 1,421 165Profit and loss account 1,300 1,150Shareholders' funds 11,036 4,497 * Restated due to adoption of FRS 20 CONSOLIDATED CASH FLOW STATEMENT 2007 2006FOR THE YEAR ENDED 30 APRIL 2007 £000 £000 Net cash inflow from operating activities 2,389 1,757 Returns on investments and servicing of financeInterest paid (14) (58)Interest received 137 28Net cash inflow/(outflow) from returns on investments 123 (30)and servicing of finance Taxation (937) - Capital expenditure and financial investmentSale of tangible fixed assets 1,337 34Purchase of tangible fixed assets (87) (42)Purchase of investments (1,850) -Net cash outflow from capital expenditure and financial investment (600) (8) FinancingRepayment of short term borrowings - (43)Repayment of long term borrowings - (572)Issue of share capital 4,970 355Dividends paid (1,374) - Net cash inflow/(outflow) from financing 3,596 (260) Increase in cash 4,571 1,459 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2007 2006 £000 £000 Profit for the financial year 1,337 1,760Unrealised deficit on revaluation of land and buildings - (143)Total recognised gains relating to the year 1,337 1,617 NOTE OF HISTORICAL COST PROFITS AND LOSSES 2007 2006 £000 £000 Profit on ordinary activities before taxation 2,658 2,214Difference between historical cost depreciation and charge - 4based on revalued amountsRealisation of gain on disposal 187Historical cost profit on ordinary activities before 2,845 2,218taxation Historical cost profit transferred to reserves 1,524 1,764 1. BASIS OF PREPARATION The financial statements have been prepared in accordance with applicable UKaccounting standards (UK GAAP) and under the historical cost convention, withthe exception of the revaluation of land and buildings. The principal accounting policies of the group are set out below. The policieshave remained unchanged from the previous year apart from the adoption of FRS20: 'Share-based payment'. This change is described in more detail below. 2. CHANGES IN ACCOUNTING POLICIES In preparing the financial statements for the current year, the group hasadopted FRS 20 'Share-based payment' (IFRS 2) In accordance with FRS 20, the fair value of equity-settled share-based paymentsto employees is determined at the date of grant and is expensed on astraight-line basis over the vesting period of the share options or warrantsbased upon the group's estimate of share options and warrants that willeventually vest. The fair value has been measured by the use of a binomiallattice pricing model. Following the adoption of FRS 20, a prior year adjustment has been made todecrease the profit and loss reserve brought forward at 1 May 2006, and create ashare option reserve, of £165,000 to reflect the option charge which would havebeen incurred in the previous years and the year ended 30 April 2006 had FRS 20been adopted earlier. The profit and loss account for the year ended 30 April2006 has been restated to reflect the share based payment charge of £40,000 forthat year. The group recognised total expenses of £1,256,000 relating to equity-settledshare-based payment transactions in the year ended 30 April 2007. £1,085,000 ofthis related to the grant to Babcock & Brown of warrants over 7,880,000 sharesat £1.20 per share as part of the strategic alliance entered into with them. 3. NON RECURRING TRANSACTION COSTS The non recurring transaction costs relate to the following items - costs associated with the issue of warrants to Babcock & Brown resulting inthe FRS 20 cost of £1,085,000, and - charges incurred associated with the raising of capital and the listing of thecompany on AIM of £466,000. 4. EARNINGS PER ORDINARY SHARE The calculation of the basic earnings per share is based on the profitattributable to ordinary shareholders divided by the weighted average number ofshares in issue during the year. 2007 2006 Profit Weighted Per share Profit Weighted Per share average amount average amount pence £000 number of pence £000 number of shares sharesBasic earnings per shareProfit attributable to ordinary 1,337 24,124,075 5.54 1,760 21,900,922 8.04shareholders Dilutive effect of securitiesOptions 1,114,318 (0.22) 738,410 (0.25)Warrants 2,713,100 (0.54) 670,116 (0.22)Convertible loans - 767,852 (0.26)Diluted earnings per share 1,337 27,951,493 4.78 1,760 24,077,300 7.31 The average share price during the year was 158.9p, which meant that thedilutive securities shown in the table above were those which have exerciseprices of 30p, 40p, 85p, 98p 108p and 150p per share. The calculation of normalised earnings per share of 11.4p on operating profit,excluding non recurring transaction costs, assumes that the non recurring costsare not allowable for tax and is therefore based upon a post tax profit ofProfit for the year plus the non recurring costs. 2007 2006 Profit before Weighted Per share Profit Weighted Per share exceptional average amount average amount items number of pence £000 number of pence £000 shares sharesBasic earnings per shareProfit attributable to ordinary 2,751 24,124,075 11.40 1,760 21,900,922 8.04shareholders Dilutive effect of securitiesOptions 1,114,318 (0.45) 738,410 (0.25)Warrants 2,713,100 (1.11) 670,116 (0.22)Convertible loans - 767,852 (0.26)Diluted earnings per share 2,751 27,951,493 9.84 1,760 24,077,300 7.31 5. FIXED ASSET INVESTMENTS Listed Total Investments £000GroupAt 1 May 2006 - -Additions 1,850 1,850At 30 April 2007 1,850 1,850 Listed investments represent the Company's 6.8% interest in AH MedicalProperties plc which as at 30 April 2007 had a market value of £1,540,000 6. RESERVES Share based Share Profit and Revaluation Total payment premium loss account reserve reserve account £000 £000 £000 £000 £000 At 1 May 2006 - 2,771 1,315 187 4,273Prior year adjustment FRS 20 165 - (165) - - 165 2,771 1,150 187 4,273Profit for the year - - 1,337 - 1,337Premium on issue of shares during the year - 5,269 - - 5,269Dividends paid - - (1,374) - (1,374)Revaluation reserve movement - - 187 (187) -Share based payment reserve 1,256 - - - 1,256At 30 April 2007 1,421 8,040 1,300 - 10,761 7. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2007 2006 £000 £000Profit for the financial year 1,337 1,760New shares issued 5,320 355Dividends paid (1,374) -Reduction in revaluation reserve - (143)Transfer to share based payment reserve 1,256 40Net addition to shareholders' funds 6,539 2,012Shareholders' funds at 1 May 2006 4,497 2,485Shareholders' funds at 30 April 2007 11,036 4,497 8. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2007 2006 £000 £000 Operating profit 2,394 2,244Depreciation and amortisation 181 158Loss on disposal of fixed assets - 1FRS 20 adjustment 1,256 40Decrease in stock 15 40Increase in debtors (639) (1,480)(Decrease)/Increase in creditors (818) 754Net cash inflow/(outflow) from operating activities 2,389 1,757 9. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS / (NET DEBT) 2007 2006 £000 £000 Increase in cash in the year 4,571 1,459Cash inflow from change in net debt - 615Change in net debt resulting from cash flows 4,571 2,074Repayment of net funds by issue of shares 350 -Movement in net funds in the year 4,921 2,074Net funds/(debt) at 1 May 2006 1,152 (922)Net funds at 30 April 2007 6,073 1,152 10. ANALYSIS OF CHANGES IN NET FUNDS At 1 May 2006 Cash flow Non-cash At 30 April flows 2007 £000 £000 £000 £000 Cash in hand and at bank 1,502 4,571 - 6,073Short term debt (300) - 300 -Long term debt (50) - 50 - 1,152 4,571 350 6,073 11. RELATED PARTY TRANSACTIONS Ashley House plc and A H Medical Properties plc (including its subsidiaryMedical Properties Limited) were related as a consequence of the share staplingagreement entered into in September 2004. The stapling was severed on 11 January 2007. Under the share stapling arrangement, the two companies hadidentical shareholders registers and a number of common directors. During theyear Ashley House plc made sales at an arms length basis of £7,190,000 (2006:£9,915,000) to A H Medical Properties plc. At 30 April 2007 the balance duefrom A H Medical Properties plc was £2,955,000 (2005: £2,717,000). During the year Ashley House plc made sales on an arm's length basis to MedicalProperties Limited, a subsidiary of A H Medical Properties plc, of £11,247,000(2006: £4,441,000). At 30 April 2007 the balance due from Medical PropertiesLimited was £1,451,000 (2006: £563,000) Since the termination of the share stapling agreement and subsequent shareissues by both Ashley House plc and A H Medical Properties plc, and the change in their respective board members,these companies are no longer related parties. All supplies made to AHMP and Medical Properties Limited are related to thedesign and construction of medical centres. In every case, the rent for thebuilding which drives the value of the scheme, is set by the District Valueracting for the Primary Care Trust (NHS). Transactions between Ashley House plcand A H Medical Properties plc are entered into on the basis of marketequivalent pricing and are ratified by the independent Non Executive Directorsof AHMP, who are not connected to Ashley House plc. During the year the group received invoices from Directors or their companies of£20,000 (2006: £16,000) from Scheidegg Limited, a company in which J H Gunn hasan interest and £71,000 (2006: £63,000) from Layland Walker Limited, a companycontrolled by B Walker. At 30 April 2007 the balance due to Layland WalkerLimited was £10,404. In addition, the company made payments of £26,000 (2006:£19,000) to Beechwood House Finance Limited, a company in controlled by D Burtonand £67,000 (2006: £17,000) to Gibson Freake Edge, a partnership of which AGibson is a partner. At 30 April 2007 the balance due to Gibson Freak Edge was£5,596. 12. Dividends The directors approved on 13 December 2006 the payment of an interim dividend of2p per share on 26 January 2007. Subsequent to the year end but prior to theapproval of the financial statements, the directors have recommended the paymentof a dividend of 3 pence per share, totalling £826,000. 13. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The consolidated balance sheet at 30 April 2007 and the consolidated profit andloss account, consolidated cash flow statement and associated notes for the yearthen ended have been extracted from the Group's 2007 statutory financialstatements upon which the auditors opinion is unqualified and does not includeany statement under Section 237 of the Companies Act 1985. Those financial statements have not yet been delivered to the registrar ofcompanies. -------------------------- This information is provided by RNS The company news service from the London Stock Exchange